Suddenly everyone wants to sit with it at lunch. Here’s who’s promising what...
Something funny has happened this election. KiwiSaver, the thing most of us set up, and then (honestly?) ignore for a decade or so until we need it for our first home, has become the absolute star of the show.
Every second press release has something to say about making it better, grow it faster, adjust it’s tax, start it earlier for babies. And I get it. It’s something common to everyone, it’s important, long term investing and it’s also the future of how we all look after ourselves in retirement, especially with an ageing population.
Because I’m a bit of a KiwiSaver enthusiast, I thought it was worth running through some of these potential changes, particularly those that will affect first home buyers and younger New Zealanders in the coming years.
This is NOT me telling you who to vote for, but it’s a rundown of what might change, what’s definitely staying the same, and what (if anything) you should do about it. Let’s crack into it!
Where are we at right now?
This is a good place to start.
Right off the IRD website, here are the current “rules” as they pertain to KiwiSaver.
Default contribution rate: 3.5% from you, matched by your employer at 3.5%. This went up from 3% on 1 April 2026.
It’s already scheduled to rise again: to 4% each on 1 April 2028. That’s existing law, so is also locked in at this stage.
Need a break? You can apply to drop back to 3% for 3 to 12 months.
Government contribution: 25 cents for every dollar you put in, up to $260.72 a year. To get the max you need to contribute $1,042.86 of your own money each year (1 July to 30 June).
Earning over $180K? No government contribution at all.
16 and 17 year olds: now get employer contributions and the government contribution too.
And for first home buyers, the withdrawal rules are the same as they’ve been:
You need to have been a member for at least three years.
You can take out everything except $1,000. That’s your contributions, your employer’s, the government’s and the returns on top.
Remember anything that is lined up as an election promise doesn’t change immediately after the election. Every proposal currently on the table will need either a law change or to go down an official route of updating rules and phasing out old ones.
And because we vote MMP, where there are a lot of opposing and conflicting views, some of these promises might get swapped, morphed, softened or thrown out altogether during coalition talks.
So… what might those be? In alphabetical order so we’re not picking any favourites here!
ACT
ACT wants to remove the tax on investment earnings inside KiwiSaver (and other super schemes). In exchange, it would scrap the government contribution for anyone who’s already getting employer contributions.
ACT says the tax relief would be worth more to most people than the $260.72 they’d lose, and puts the cost at around $1B a year.
The other big thing: ACT doesn’t want KiwiSaver to be compulsory. Their view is that it should stay your choice.
Green Party & Te Pāti Māori
Neither had released a specific KiwiSaver policy when I went looking.
Te Pāti Māori has previously called for Māori to be able to access KiwiSaver and super at an earlier age, citing lower life expectancy.
Both have tax policies that touch property, but not KiwiSaver, so more on that later!
Labour
Labour would make employer contributions compulsory from 1 July 2028, rising to 6% by 2032. The twist is that your own contribution stays flexible.
The default would be 4%, but there’d be no minimum, so you could reduce or pause yours and your employer would still contribute in the same way.
Employer contributions would also keep going while you’re on paid parental leave or over 65.
And Labour would ban new “total remuneration” deals, where your employer’s contribution comes out of your pay packet.
National
National would make KiwiSaver (or an equivalent scheme) compulsory for every worker from 1 July 2028. Contributions would climb to 6% from you and 6% from your employer by 2032. That’s 12% going in, total.
You’d only be able to pause contributions if you meet the existing hardship test. On top of that, from 1 July 2027:
Every newborn would be enrolled at birth with a $1,500 “Baby Boost” from the government.
The government would contribute while you’re on paid parental leave, even if you’re not.
Employers would have to keep contributing for staff over 65.
NZ First
NZ First also wants KiwiSaver compulsory, and it’s aiming highest in terms of contributions, which would start at 8% each from employees and employers, eventually rising to 10%.
Babies would get a $1,000 government contribution at birth.
No specific dates have been given.
Opportunity
Opportunity wants a brand-new compulsory scheme, “KiwiSaver 2.0”, sitting alongside the current one.
Contributions would rise to 6% each over eight years.
The money going in would be tax-free, and the tax on fund earnings would phase out over 20 years.
The catch for home buyers: you couldn’t withdraw from KiwiSaver 2.0 for a first home or for hardship.
Instead, Opportunity says you’d be able to borrow against your balance.
Exactly how that would work hasn’t been spelled out yet.
So what does this mean if you're saving for your first home?
I get asked about this a lot and that’s fair enough, as KiwiSaver does a lot of heavy lifting for the majority of first home buyers.
In September alone, 4,250 people pulled out a combined $195.7M to buy their first home. That’s a lot of cash!
Most parties aren’t touching first home withdrawals. Of the policies I found, Opportunity is the only one proposing that the new money couldn’t be used for a first home. Even then, it would apply to the new KiwiSaver 2.0 scheme, not the KiwiSaver you’ve already got.
Bigger contributions cut both ways. If contribution rates climb, your deposit grows faster. Brilliant. But more coming out of your pay also means a smaller take-home and that’s the biggest impact practically to everyone at the moment, in a time that is expensive. It feeds into the serviceability conversation around how much first home buyers can borrow.
Low-deposit lending is also in the mix. National has promised to lift the income cap on the First Home Loan to $300K for everyone. That’s the scheme that lets you buy with a 5% deposit, which for lots of people comes straight out of KiwiSaver. Right now the cap is $95K for a single buyer, or $150K for couples and buyers with dependents. National’s view is that increasing to $300K would open up low deposit lending for more first home buyers.
What can you actually do about this?
Remember the election creates a lot of noise and that’s what the politicians are aiming for.
Beyond your own two ticks, the overall outcome of the election is out of your hands.
So, my advice is to check your current KiwiSaver set up is working for you, with a few key questions;
Are you getting the full government contribution? If you’re not earning, self-employed or contributing less than $1,042.86 a year, you could be leaving up to $260.72 on the table. Free money you can access that adds up the longer it’s in there.
Does your fund match your timeline? Buying a first home in the next year or two is a very different plan from retiring in 30 years, and there are also considerations around risk tolerance, fund choice and alignment with your goals overall. If you’ve never looked at which fund you’re in, now is a great time.
When did you join? You need three years of membership before you can make a first home withdrawal, and sometimes people assume they are or aren’t eligible. Check your date (logging into the IRD website is a great place to do this, in the KiwiSaver tab)
So while this is an article about what might change, it’s intended to keep you informed, not freak you out. Remember to make your decisions based on what’s real today, and what’s right for your goals heading forward.
If you need a hand working this out, chat to my Team.
Go vote. Then go check your KiwiSaver. It’s working away in the background for you. Make sure it’s working as hard as it can.
